AGENTS are turning down some holiday bookings because
they cannot match aggressive prices of rival retailers without losing money.
Package holiday sales are almost flat following a
pick-up in the second week of January.
Industry statistics show the market was 0.3% down in
the week to January 11. This weekend, January 17-18, and next weekend, are
crucial for sales.
Unofficial figures suggest Airtours Holidays is 14%
down, JMC 5% up, Thomson Holidays 1%-2% down and First Choice Holidays level.
Retail discounts have hit the highest levels in years
as agents compete on the high street.
Lunn Poly managers have already been accused of
offering discounts up to 16% instead of 6%, causing discounts to “spiral out of
control”.
While most agents are price matching – as they are
played off against each other by consumers – some say the aggressive discounts
are not worth matching.
Ilkeston Co-op Travel managing director Chris Smith
said shops were turning away some sales because they would lose money by
dropping prices lower.
“We’ve taken a lot of pain because of the high
discount levels. We’d normally give away 6% but this year we’re touching 8% to
compete.
“Customers are playing the game and you get examples
where we will make a loss – so we have to pull out.”
Thomas Cook director of trade relations Ian Derbyshire
said shops would refuse certain loss-making bookings.
“We’re trying to match prices but where it is
financially sensitive you let someone else take the booking.”
Lunn Poly claims it has been “unfairly singled out”.
TUI UK commercial director Derek Jones said: “There
are a lot of competitive discounts being used in the market to close sales.”
The Co-operative Travel Trading Group has been
particularly aggressive is offering £100 and £50-off deals on 16 operators at
the weekend to stimulate sales. Cosmos, Sovereign, Hayes and Jarvis and Libra
Holidays are offering £100 off.
CTTG commercial manager Mike Beaumont conceded they
were “very big savings” but was “very happy financially” with the results.
Beaumont said CTTG was seeing double-digit growth
compared with a market in single figure growth.